India's super-rich club sees 10 new entrants in 2020; wealth up 33%

Mukesh Ambani of Reliance Industries once again topped the charts with total net worth of $87.5 billion (or Rs 6.44 trillion), up 37.2 per cent in the past 12 months
The recent rally after the lockdown on the bourses has surprised many and also benefited India’s billionaire promoters.

The super-rich club grew to an all-time high of 90 billionaires (in dollar terms) against 80 at the end of December 2019.

Together, these billionaires now have combined wealth of $483 billion (around Rs 35.5 trillion), up 33 per cent in the past 12 months from $364 billion on December 31 last year.

The combined wealth of these billionaire promoters is equivalent to nearly a fifth of the India’s estimated annual gross domestic product (GDP) at current prices when converted into dollars.

In contrast, the International Monetary Fund expects a 9.6 per cent decline in India’s current GDP in FY21 to around $2.6 trillion.

Broadly speaking, GDP is the sum of all income in an economy, including profits and individual incomes.

Mukesh Ambani of Reliance Industries once again topped the charts with total net worth of $87.5 billion (or Rs 6.44 trillion), up 37.2 per cent in the past 12 months.

In comparison, Ambani’s wealth had increased by 47 per cent in 2019. He added around $21.5 billion to his wealth in 2020 at the rate of around $410 million a week or around Rs 480 crore a day at the current rupee-dollar exchange rate. (See the adjoining chart.)

Among the country’s wealthiest promoters, the Gautam Adani family of Adani Group saw the biggest rise in percentage terms in wealth in 2020. The Adani family’s wealth more than doubled in 2020 to $41 billion from $20 billion a year ago. This was due a big rally in the Adani Group stocks led by Adani Green, Adani Ports & SEZ, and Adani Enterprises. The combined market capitalisation of the listed Adani group companies more than doubled in the past 12 months to Rs 4.18 trillion on Thursday from around Rs 2 trillion at the end of 2019.

The Adani family owns, on average, around 73 per cent in its listed companies against India Inc’s average of around 47 per cent. This translates into a very high networth for the family compared to other promoter families.

Technology entrepreneurs such as Azim Premji of Wipro, Shiv Nadar of HCL Technologies, and the Infosys founders also saw a big jump of 55-67 per cent in their wealth in 2020 as investors bid up the share price of their companies due to work-from-home opportunities.

Other promoters to gain this year include those of Asian Paints (48 per cent), Radhakishan Damani of Avenue Supermart (41 per cent), Dilip Shanghvi of Sun Pharma (36 per cent), and Sunil Mittal (21 per cent).

Promoter wealth in the listed space is around Rs 41.6 trillion ($566 billion), up 33 per cent from the Rs 31.3 trillion a year ago ($440 billion).

The list is, however, dominated by top promoters. In all, the 10 richest promoters added $76 billion (around Rs 6 trillion) to their wealth in 2020 at the current exchange rate.

As a result, the top 10 richest promoters now account for a record 44.4 per cent of all promoter wealth in the country, up from the 40 per cent at the end of December 2019 and 28 per cent at the end of March 2018.

The analysis is based on the promoters’ stake and market capitalisation of a common sample of 807 companies that are part of the BSE500, BSE Mid-cap, or BSE Small-cap index.

The sample excludes government-owned companies, listed subsidiaries of global multinationals, financial institution-owned companies, and their subsidiaries such as HDFC and ICICI Bank.

The list also excludes Tata Group, where ownership rests with charitable trusts rather than individuals or families.

Purely in percentage terms, Yoga guru Baba Ramdev and business partner Acharya Balkrishna saw the biggest increase in their wealth and are now the newest billionaire promoters in the country. Their wealth skyrocketed from around Rs 100 crore at the end of 2019 to nearly Rs 20,000 crore on Thursday. This was due to a spike in the market capitalisation of Ruchi Soya, which Patanjali Ayurved acquired. Patanjali owns nearly 99 per cent in Ruchi Soya.

Other big gainers include Murali Divi of Divi’s Laboratories (103 per cent), Reddy’s of Aurobindo Pharma (99 per cent), Premchand Godha of Ipca Laboratories (91 per cent), and Chava Satyanarayana and Venkata Ravi Kumar Vantaram of Laurus Labs (379 per cent).

Many promoters, however, also saw a decline in their wealth in 2020 either due to financial issues in their companies owing to Covid-19 or because they cut stakes in them.

Kishore Biyani of Future Group was the biggest loser. His wealth was down 82 per cent due to a sharp fall in the share prices of his companies.

C S Ghosh of Bandhan Bank also saw a 49 per cent dip in his wealth because he halved his promoter stake to meet regulatory norms.

Other losers during the year include Ravi Raheja of Chalet Hotels, the Mehtas of Rajesh Exports, R D Shroff of UPL, and Irfan Razack of Prestige Estates.

On average, two promoters saw an increase in their wealth this year for every one promoter seeing a decline. In all, 443 promoters saw an increase in their net worth against 208 seeing a decline.

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